Workers’ compensation is a system of insurance that provides benefits to employees who are injured or become ill due to their job. Benefits can include medical expenses, income replacement, and death benefits. Workers’ comp is typically mandatory in most locations, meaning employers must provide coverage for their employees.
As a significant expense for many employers, reducing workers’ compensation insurance is beneficial for small and medium-sized businesses. But how? Melody Beach Consulting Group, located in Southbridge, MA, can help.
Before your workers’ compensation costs can decrease, you must first understand:
- How does workers’ comp work?
- What does workers’ comp cover?
- How can an HR consultant help you reduce workers’ comp costs?
How does workers’ compensation work?
Generally speaking, workers’ compensation is a no-fault system, which means that benefits are available to employees regardless of who is at fault for the injury or illness. In exchange for these benefits, employees usually give up their right to sue their employer for negligence.
State-run workers’ compensation plans are typically financed through a combination of employer premiums and taxes. Employer premiums are paid by the employer and are based on the number of employees and the amount of risk associated with the business. Then, taxes are paid into the state’s workers’ comp fund, which is used to pay for claims filed under the state-run plan.
Meanwhile, private workers’ compensation insurance plans are financed entirely through employer premiums.
What does workers’ compensation cover?
This insurance typically covers medical expenses, income replacement, and death benefits.
- Medical expenses can include doctor’s visits, hospital stays, prescription drugs, physical therapy, and rehabilitation.
- Income replacement benefits can replace a portion of an employee’s lost wages while they recover from an injury or illness.
- Death benefits can provide financial assistance to an employee’s family in the event of an on-the-job fatality.
But not all injuries and illnesses are covered. To be eligible for workers’ compensation benefits, an employee must be able to prove that their injury or illness is work-related. This can be done by providing medical evidence or witness testimony indicating that the injury or illness occurred while working.
How can an HR consultant help you reduce workers’ compensation costs?
HR consultants are experts in workers’ compensation and can help you reduce your insurance costs.
By conducting a workers’ compensation audit, HR consultants can identify issues that may be contributing to high costs. They can also help you develop strategies to reduce workers’ comp costs, such as implementing a return-to-work program or improving safety standards.
In addition, HR consultants can negotiate with insurance providers to get you the best rates possible.
If you have any questions about whether your business is required to provide workers’ comp coverage, consult with an HR consultant. By working with a company like Melody Beach Consulting Group, you can ensure that your workers’ compensation costs are as low as possible. Contact us today to learn more.